Their work was featured in the Academy of International Business’ journal AIB Insights.  

Multinational enterprises (MNEs) increasingly have to take into account a huge variety of digital regulations coming from different countries and regions. These regulations are often fragmented and there is not yet a clear overview of what these regulations mean for businesses. Coche's and Kolk's publication When Digitalization Meets Regulation across Borders highlights the impact of global data-related regulations on MNEs.

Companies must adapt

The authors provide actionable insights for companies heavily affected by global data regulations. Companies must adjust their data practices to comply with differing regulations in various regions, such as the European Union's General Data Protection Regulation (GDPR) or the more recent AI Act. This can require substantial changes in how businesses handle data, from collection and storage to processing. Non-compliance can lead to heavy fines and reputational damage. Businesses must ensure transparency in their operations, impacting their strategies, business models, technology investments, internal processes, and outsourcing activities.

Higher costs of doing business

These (extra-territorial) regulations often mean higher operational costs, as companies need to invest in legal expertise, compliance technologies, and sometimes restructure their cross-border data flows. However, they also create a more trustworthy environment for customers, which can lead to increased customer loyalty and a competitive edge for companies that prioritise privacy and transparency.

Alphabet

The paper illustrates this using the MNE Alphabet (Google’s parent company) as an example. It discusses how Alphabet had to adapt its operations because of five different EU laws, part of the EU’s ‘digital strategy’. By exposing Alphabet’s firm characteristics, the authors show how these laws (similarly) affect other (smaller) firms, leading to changes in digital strategies, compliance efforts and value chains.

Different stakeholders

Along with multinationals, policymakers, tech innovators, and legal advisors are key target groups who can use these insights to navigate the complexities of global digital regulation. But Coche also stresses that these regulations are crucial for individuals. ‘These laws have huge ethical considerations,’ says Coche. ‘They ensure people’s personal data is protected and it gives them more control over how their data is collected and shared, as well as how digital services are presented to them.’
There are various regulations in place that govern important aspects of our lives, such as:

• Tackling illegal content online
• Ensuring fair competition
• Enhancing access to the ‘Internet of Things’ and public sector data
• Enhancing trust in data-sharing
• Ensuring trustworthiness and fairness of AI systems
   

Follow-up research on this topic is being conducted by the researchers. The authors believe that it’s crucial to bridge the gap between regulations and practice for all involved. ‘These laws are evolving and they’re here to stay. There’s a lot at stake for everyone involved and MNEs play a huge role’, explains Coche.